The City of London and its role as a financial centreТhe city of London and its role as a financial center

Chapter 1.

Introduction. The Concept of the City of London.

Britain is a major financial centre providing a wide range of specialised
services. The country’s economy has for a long time been directed through
the great financial institutions which together are known as “The City”,
capital “C”, and which are mainly located in the famous “Square Mile” of
the City of London.

The “Square Mile” in the Roman Times historically emerged on the Thames as
the business and industrial nucleus of the future London. Through centuries
of business and religious developments the City assumed its role of the
world commercial centre as it is known today . When in the 20th century
Great Britain lost its empire and other financial centres got established
in the world, the city adapted itself to changed circumstances to remain
a world financial leader. The City of London has the greatest
concentration of banks in the world (responsible for about a quarter of
total international bank lending) , the world’ s biggest insurance market
(with about 1/5 of the international market ), a Stock Exchange with a
larger listing of securities than any other exchange, and it remains the
principal international centre for transactions in a large number of
commodities. A large proportion of Britain’s wealth has been invested by
the City overseas. The City’s annual foreign income roughly double that of
the British manufacturing industries. The above proves the City’s world
significance as a financial centre. Geographically the City is a large
office area bubbling with life at daytime and comfortably quiet outside the
office hours. It’s historical sights like the Tower of London, St Paul’s
Cathedral, the Museum of London, the Monument and others as well as the
beautifully impressive architecture of the office buildings attract crowds
of visitors. The only housing project, the Barbican, provides very
expensive accommodation along with an arts centre, a school and some
official premises.

Since after the mid - 80s financial and related services have started to
expand outside the “Square Mile” though the City of London remains the
symbol and actual reality of the country’s power.

C h a p t e r 2

Britain’s Economic and Financial Position Today at Home and Abroad.

Finance and industry of the British economy go hand in hand as industry
requires a diversified network of financial institutions to develop
successfully. Although Britain’s financial power today exceeds that of
the country’s industrial achievement, the country was for years “the
workshop of the world”. It still remains a highly industrialised country
but the end of the 20th century saw tendencies for the economic decline.

Historically, after two world wars and the loss of its empire Britain found
it increasingly difficult to maintain its leading position in Europe. The
growing competition from the United States and later Japan aggravated the
country’s position.

Britain struggled to find a balance between the governments intervention in
the economy and almost completely free-market economy of the United States.
The theories of the great British pre-war economist J. M. Keynes
stated that capitalist society could only survive if the government
controlled, managed and even planned much of its economy. These ideas
failed to get Britain out of the image of a country with quiet market
towns linked by steam trains puffing slowly through green meadows. Arrival
of Margaret Thatcher, the Conservative prime-minister in office between
1979 and 1990, discarded these theories as completely wrong. Mrs. Thatcher
claimed that all controls and regulations of the economy should be removed
and a market economy should recover